North Carolina hospitals spar over treatment for the uninsured

Maryalene LaPonsie |
December 17, 2010

When it comes to hospital care, should a university system be competing with a private institution for patients? And just who should end up footing the bill for those without health insurance? It's a debate that is taking North Carolina's WakeMed Health & Hospitals toe-to-toe with the University of North Carolina (UNC) hospital system.

Clash of the Wake County titans

The dispute between WakeMed and UNC took a very public turn at the end of November when WakeMed requested copies of UNC tax records and correspondence with physician groups. WakeMed asserts that UNC, and specifically its subsidiary Rex Healthcare, are using taxpayer dollars to give them an unfair advantage, according to The News & Observer Publishing Co.'s NewsObserver.com website.

At stake is a growing Wake County population that WakeMed says is unfairly being pulled to UNC facilities. Among the actions that have alarmed WakeMed in recent months:

An announced affiliation between UNC Health and Wake Heart & Vascular Associates - a major cardiology practice in the area and long-time associate of WakeMed

A $120 million expansion of Rex Healthcare's Raleigh campus that is expected to compete with WakeMed's heart care program

Expanded advertising for the UNC Health children's hospital within close proximity of WakeMed's new children's hospital

Although Rex Healthcare claims on its website to be a 'private, not-for-profit health care system,' it was actually purchased by the state-run UNC for $100 million in 2000. With Rex knocking on the door of Wake County and threatening to cut into the profitable cardiology market, WakeMed is demanding to know whether taxpayer dollars are being used to compete with private businesses, according to an Associated Press article published by Bloomberg Businessweek.

How health insurance plays into the situation

As the reader of an affordable health insurance blog, you may be thinking 'what does this have to do with medical insurance?' Well, as with seemingly any issue in the health care industry, health insurance takes a front-and-center spot when it comes to whether a business remains in the black or struggles in the red.

According to WakeMed CEO Bill Atkinson, his hospital system provides 80% of all charity care in Wake County. That means that of those without health insurance and no way to pay the bill, WakeMed picks up the tab for 8 out 10 cases. The hospital system says its annual charity care totals more than $280 million for all of North Carolina.

With UNC Health receiving a direct infusion of $36 million from the state, WakeMed officials think their competitors should be providing more care for uninsured North Carolinians. They also take offense to the fact that UNC Health hospitals receive greater compensation for Medicaid patients than other hospitals.

Coupled with an expansion of Rex services into an area that is traditionally very profitable - cardiology - WakeMed sees UNC Health as a government-sponsored bully working to edge out the competition. The fear is that the university hospital system will gobble up profitable patients while other health care organizations are left with the scraps, including those without personal medical insurance.

All this brings us to questions that extend far beyond North Carolina. Namely, what is the role of publicly funded hospitals? Should they compete with private hospital systems? Does their use of taxpayer dollars mean they have an increased obligation to serve those without health insurance?